By Or Perlman, Country Growth Lead, UK/IE at SumUp
Contactless transactions are on the up in the UK. In 2020, nine out of ten card transactions were contactless and these contactless payments accounted for 57 per cent of all debit card and 35 per cent of all credit card transactions.
In response to demand, and the sums of money moving around, the FCA has announced that the single transaction limit is to increase from £45 to £100 and the threshold for multiple contactless payments is set to increase from £130 to £300. The launch sparked some concerns on security, for instance, if a card is lost or stolen, however banks have increasingly effective ways of detecting fraudulent behaviour and more efficient channels through which to block a card. For those of us who can remember contactless’ introduction over a decade ago, and the original £10 limit, these are heady days indeed. But why is this happening, and why does it matter?
The boom in contactless payment was well underway before the pandemic set in. Shifts in customer behaviour had led to an increase in demand for more convenient methods of payment, and tapping a card or mobile device on a card reader – and its instantaneous result – was proving a winner. At the same time, card payment overtook cash as the UK’s most frequent method of payment in 2017. Where cash had previously been king, card is now the default for Brits down the shops.
This matters as shopper trends align with sales opportunities and business revenue, especially in physical stores and marketplaces. Barriers to payment need to be alleviated or removed entirely, otherwise opportunities will be missed and businesses will feel a pinch in revenue. In the UK, as the country enters the next phase of unlocking, there is a great deal of shopping about to happen. Figures from retail data company Springboard show “pent up demand from shoppers for bricks and mortar stores” which supports its forecast for “a significant uplift in footfall” now retail is open. Footfall is expected to boom by up to 50%.
Gone are the days where customers will settle for the excuse that a business is cash only, and this rings true as adoption of card technology is more and more widespread. I think most of us would struggle to name more than a handful of shops we regularly use that are cash only; even (most) black cabs in London accept card payment these days. Customer behaviours demand it, and businesses and vendors that haven’t accepted this modernisation will lose out.
Therefore businesses, particularly physical stores that handle day to day customer transactions, need reliable technology in place to meet this pent up demand, and capitalise on the incoming spending surge.
Embattled SMEs don’t need, after a turbulent year, underperforming sales terminals that cause in-store disruptions. lost. We’ve all been there – an embarrassed shop worker, awkwardly lifting the terminal skyward with an explanation that the device has been ‘a bit funny today’, as you wonder if your current account has gone to zero since you started your purchase – but what if that doesn’t have to be the case?
Vendors have many options, including mobile point of sale (mPOS), a system that has come on leaps and bounds in the past few years. As the name suggests, a mPOS device can go anywhere, and take payments for a vendor; making it ideal for anyone that works on the move, whether that be a food truck, or a mobile mechanic, and many more fields. These are available, in SumUp’s case, with unlimited data plans to maximise the portability of the device and medium.
Technology has kept up with demand, and that means that vendors have no excuse to not meet customer requirements. The technology is safe and streamlined, with aesthetic preferences catered for, alongside improvements in reliability and scope of operations. Payment technology is ever-evolving and mPOS is at the forefront of the cash to card progression. Why worry about dashes to the cash point to pay a tradesperson when you know full well the technology is there for them to take card payment on the spot, in a safe and secure way?
A progression to a cashless society has its perks, namely convenience and efficiency, but also downsides, notably the requirement to mitigate barriers to access for vulnerable people, and it’s being driven by customer demand and behavioural change. All of this was in motion pre-pandemic and a year of being nudged toward card payment has reinforced the UK’s change in shopping habits.
SMEs will continue to benefit from the rapid developments in payment technology. Flexibility enables growth, and vice versa, and it’s a dual benefit of SMEs using mPOS technology. Customers now expect to have the option to pay by card and it’s important that vendors keep up with this demand. Reliable contactless systems will keep customers happy, and help keep a business going from strength to strength.
Or Perlman is Country Growth Lead for UK/IE at SumUp (www.sumup.co.uk)